Andreas Schmidt

At 39, Andreas Schmidt seems young to be a powerful media executive, but perhaps its his youth that enabled him to see opportunity in what others saw as a threat.

Schmidt is credited as the architect of Bertelsmanns bold deal with the popular and controversial music file-swapping service Napster, a move that changed a legal foe into a partner and made Bertelsmanns Internet strategy look savvier than those of its rivals.

Schmidt, who until last summer headed America Online Europe, believes Napster can be transformed into a for- profit service distributing all types of media over both the wired and wireless Web.

The company hopes to relaunch the service this summer, but no dates or details have been released.

Meanwhile, Schmidts toughest challenge will be keeping the new Napster appealing to a substantial fraction of its 51 million users. To do this, hell need to add the other major record labels music to the service. So far, the other labels are continuing with their lawsuits, perhaps, insiders say, because they want as much from Napster as Bertelsmann got.

Another challenge for Schmidt is developing technology to enable the new service to track copyrighted material as unobtrusively as possible. Liquid Audio has licensed tracking technology to Napster, but Schmidt may have another approach in mind.

As a subsidiary of Bertelsmann, the e-Commerce Group includes BMG Music Service, a music club thats a top e-commerce site, music retailer CDnow Online, online book retailers Barnesandnoble.com and Bol.com, as well as the broadband operations of the RTL Group.